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The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information: 1. Project the financial cash
The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information:
1. Project the financial cash flow and calculate the NPV and the IRR
2. Determine the behavior of the NPV before changes in the discount rate equivalent to 0.5% (graph the NPV curve)
INPUTS VALUE 450 000 000 PARAMETERS initial investment FINANCIAL SALVATION OBSERVATIONS 80.0% from the initial investment ACPM PRICE INSURANCE 8 750 3.5% PER GALLON FROM THE VALUE IN BOOKS (EARLY YEARS TRIPS FOR MONTH TRAVEL COST 15 3570 000 dollars EXPENSES: 550 000 DRIVER SALARY 2.5% FROM THE TRUCK'S GROSS INCOME DRIVER COMMISSION (has a salary connotation) GENERAL EXPENSES ACPM CONSUMPTION 'Legal benefits are paid 12 500 000 75 MONTHLY (TIRES, TAXES, ETC.) GALLONS PER TRIP TRIP VALUE GENERAL EXPENSES ACPM PRICE SALARIES INCREASES: 7.0% 3.0% 0.5% 6.0% annual biannual monthly annual SECURITY AND SOCIAL BENEFITS (As % of salary) SECURITY AND BENEFITS PAID MONTHLY SECURITY AND BENEFITS PAID SEMESTRALLY SECURITY AND BENEFITS PAID ANNUALLY 28.00% 8.33% 13.00% The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information: 1. Project the financial cash flow and calculate the NPV and the IRR 2. Determine the behavior of the NPV before changes in the discount rate equivalent to 0.5% (graph the NPV curve) INPUTS VALUE 450 000 000 PARAMETERS initial investment FINANCIAL SALVATION OBSERVATIONS 80.0% from the initial investment ACPM PRICE INSURANCE 8 750 3.5% PER GALLON FROM THE VALUE IN BOOKS (EARLY YEARS TRIPS FOR MONTH TRAVEL COST 15 3570 000 dollars EXPENSES: 550 000 DRIVER SALARY 2.5% FROM THE TRUCK'S GROSS INCOME DRIVER COMMISSION (has a salary connotation) GENERAL EXPENSES ACPM CONSUMPTION 'Legal benefits are paid 12 500 000 75 MONTHLY (TIRES, TAXES, ETC.) GALLONS PER TRIP TRIP VALUE GENERAL EXPENSES ACPM PRICE SALARIES INCREASES: 7.0% 3.0% 0.5% 6.0% annual biannual monthly annual SECURITY AND SOCIAL BENEFITS (As % of salary) SECURITY AND BENEFITS PAID MONTHLY SECURITY AND BENEFITS PAID SEMESTRALLY SECURITY AND BENEFITS PAID ANNUALLY 28.00% 8.33% 13.00% The owner of the truck wishes to have a profitability of 2.5% per month, therefore he requests the following information: 1. Project the financial cash flow and calculate the NPV and the IRR 2. Determine the behavior of the NPV before changes in the discount rate equivalent to 0.5% (graph the NPV curve)Step by Step Solution
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